Russia-Africa Ties Boost Trade

Published on 9th October 2018

With the current sanctions between Europe and Russia, there was massive opportunity for African producers to develop their trading relationships with Russia, Managing Director at the Catalyze – International Events, Rex Bowden said in an interview after the 27th World Food Moscow exhibition held from 17-20 September in Moscow.

While EU states and Turkey have been banned from exporting some key food and beverage products to the Russian Federation, a number of African countries have identified this market opportunity. South Africa and Egypt, as examples, have had a constant growth in trade to Russia over the past five years, whereas that of other countries around the world have decreased dramatically, he explained.

According to Bowden, “Africa’s fresh produce is also growing due to massive international demand and there has been a steady growth in the output in Africa. All these factors point towards continued growth into Russia from African countries.”

The World Food Moscow exhibition has been acknowledged as the best platform for introducing new products to the Russian market. The African countries that participated in this year exhibition include South Africa, Egypt, Tunisia, Morocco, Algeria, Nigeria, Kenya, Tanzania and Rwanda.

These African countries have shown their preparedness to cooperate and are still looking at the possibility to boost exports of agricultural products especially fruits and vegetables to Russian food market to help fill in the gap after President Vladimir Putin slapped sanctions that severely limit food imports from those EU countries.

For instance, Egypt exported $26.8 billion worth of goods globally. Egyptian food companies have spotted a huge opportunity to get their products to lucrative market in Russia. In 2017, Egyptian exports to Russia increased by 30% according to Russian Trade and Industry Ministry. The future looks great for Egyptian produce in the Russian food market.

As with all exporters, there are still some key challenges such as competition from other African producing countries, namely South Africa and Morocco. Ethiopia specializes in flowers while Kenya export coffee and tea. Over the past few years, South Africa and Egypt have been the biggest represented countries at World Food Moscow. Egyptian food producers showcased fruit, vegetables, confectionery, tea, coffee and a range of meat produce. West Africa, with its tropical fruits, has missed the World Food Moscow.

“Russia has a huge and fantastic consumer base for agricultural products from Africa. Be it fresh tropical fruits and vegetables, or the processed ones, dried or canned. In fact, the African exporters have keen interests in the Russian market but face many challenges in getting their goods delivered to consumers in Russia,” Rex Essenowo, Member of the Board of Trustees, Nigerians in Diaspora Europe (NIDO) and Senior Executive of Asian Africa Trade, a Moscow based business lobbying NGO, told The Exchange.

As western sanctions on Russia loom, agricultural ministries and export promotion agencies in West African countries should come out boldly to help their farmers to perform better by utilizing these new market opportunities in Russia. There is absolutely no need complaining about lack of information. It’s time to make a good use of their foreign missions and the strength of resources to find market entry, Essenowo suggested.

South Africa’s Economic Counsellor at the Diplomatic Representative Office in Moscow, Moloko Leshaba, said that “South Africa has continued to see positive growth in exports to the Russia in a number of products. Bottled wines have been growing at more than 10 percent in the last four years, increasing the number of South African wine brands in the country.”

He, however, observed that “Russia is actively looking for alternative suppliers of food and beverages to mitigate the effects of sanctions. South African companies have the opportunity to expand into a receptive market in Russia.”

Philip Mundia Githiora, who is the Minister Counsellor at the Kenyan Embassy in Moscow, pointed out explicitly that Russia offers a large market for Kenyan agricultural products and that Kenya already exports some agricultural products including cut-flowers, tea and coffee to the Russian Federation.

He explained to in an interview that “a preferential trade agreement with Kenya in particular and Africa in general would be a positive step because such agreements hasten the progress of trade negotiations, leads to the achievement of timely, substantial reduction in barriers to trade, particularly agriculture, non-tariff barriers, and dispute settlement procedures, and stimulate economic growth and development.”

During the 2nd Uganda-Russia Intergovernmental Commission meeting that took place in May 2018, Ugandan Ambassador to the Russian Federation, Johnson Agara Olwa, urged Russian investors to consider investing in coffee, tea and fruits among other products that Uganda can expose to Russian consumers.

The Ugandan delegation to the meeting, aimed at finding ways for improving trade and strengthening relations between the two countries, comprised both government officials and business representatives.

As far back as 2014, the African diplomatic community in the Russian Federation has asked the Russian government for an initiative to waive its import tariffs on or grant special preference for African agricultural exports to Russia.

“This might help potential African exporters looking to transact agro-business or searching to export fruits and vegetables to Russia's burgeoning market under new preferential trade agreements, a significant step that will strengthen Russia-African trade relations,” an out-spoken African Ambassador told me in an interview by phone and asked that his name be withheld.

According to the Association of Russian Agricultural Products Importers, Russia has a long-term partnership agreement with South Africa and other African countries. South Africa was granted by the Russian government a preferential status in 2003, thus provided a realization of double increase export of SA fruits to Russia.

The Exchange investigations indicate that the Association is currently working with government authorities on removal of artificial barriers for import of fruits and vegetables from foreign countries to Russia.

The Association, representing the biggest and reliable importers covering about 60-70% of Russian fresh produce market, provides an excellent opportunity for African companies to enter Russian market. It is very simple method: exporters have to formulate their possibilities, confirm their export-ready potentials and send all these and other relevant details such as profile of the exporting companies.

The World Food Moscow, launched in 1991, is recognized as an exhibition primarily by Russia’s professional visitors and attracts representatives from the wholesale and retail trade. There were over 2,500 exhibitors from 62 countries and almost 50,000 visitors to the World Food Moscow.

By Kester Kenn Klomegah

The author klomegah149@yandex.ru writes frequently about Russia, Africa and BRICS.